NEVERMIND THE PROTESTS, DECADES AGO HE LET IN THE FIGHT AGAINST AIDS NEVERMIND THOSE PROTESTS.

>> EVEN BACK THEN THERE WERE CONSPIRACY THEORISTS.

HELLO.

NOTHING NEW.

>> AND THAT IS DR. TONY FELT SHE, A SCIENTIST AND A PYSICIAN ON AMERICAN MASTERS, A YEAR IN THE LIFE TUESDAY NIGHT AT EIGHT.

>>> TONIGHT ON KQED NEWSROOM , ANOTHER CALIFORNIA BANK IS IN TROUBLE.

WE TALK ABOUT THE TURMOIL AT FIRST REPUBLIC BANK AND THE COLLAPSE OF SILICON VALLEY BANK WITH CONGRESS MEMBER ROCHON A.

PLUS OVER, LIFT AND STORE DASH JUST SCORED A BIG WIN IN THE COURTS.

WE WILL DISCUSS THE FUTURE OF GIG WORKERS WITH OUR PANEL OF FINANCIAL EXPERTS.

AND WE VISIT THE LARGEST ANIMAL SHELTER IN THE BAY AREA IN TONIGHT'S LOOK AT SOMETHING BEAUTIFUL.

COMING TO YOU FROM A KQED HEADQUARTERS IN SAN FRANCISCO, THIS FRIDAY MARCH 17th 2023.

HELLO AND WELCOME TO THE SHOW.

I AM PRIYA DAVID CLEMENTS.

TONIGHT WE ARE FOCUSING ON THE REGIONAL BANKING CRISIS WHICH BEGAN WITH THE SUDDEN COLLAPSE OF SILICON VALLEY BANK ONE WEEK AGO.

WE HAVE BEEN LEARNING MORE THIS WEEK ABOUT WHAT SPARKED THE BANK RUN AND WHY THEY WERE BAILED OUT.

JOINING US NOW TO DISCUSS THE FEDERAL GOVERNMENT'S INTERVENTION IN THE NATIONAL PICTURE IS CONGRESS MEMBER ROCHON WHOSE DISTRICT INCLUDES SILICON VALLEY.

REPRESENTATIVE, THANK YOU FOR JOINING US.

>> THANK YOU FOR HAVING ME.

>> WE ARE GOING TO START HERE IN CALIFORNIA.

THERE WAS HOPE OF THE SILICON VALLEY BANK WOULD PUT TO REST CONCERNS ABOUT THE BANKING INDUSTRY BUT YES JUST YESTERDAY, ANOTHER CALIFORNIA BANK WAS BUILT OUT AS WELL BY A CONSORTIUM OF LARGE BANKS.

IT WAS TO THE TUNE OF $30 BILLION AND TODAY, STOCK PRICES ARE PLUNGING AT FIRST REPUBLIC.

HAVE YOU SPOKEN WITH LEADERSHIP AT THAT BANK?

>> I HAVE BEEN IN TOUCH WITH TREASURY AND THE FEDERAL GOVERNMENT.

I APPRECIATE THE DECISIVE ACTION THEY TOOK TO PROTECT ALL DEPOSITORS AT SILICON VALLEY BANK AND THAT WAS NEEDED OR YOU WOULD HAVE SEEN A MASSIVE REGIONAL RUN AND I WAS ADVOCATING FOR THAT WITH THE TREASURY DEPARTMENT, THE WHITE HOUSE SENIOR ADVISERS TO THE PRESIDENT.

I THINK THEY ARE CLOSELY MONITORING THE SITUATION.

I APPRECIATE WHAT JAMIE DONOVAN AND THE BANK DID YESTERDAY.

I'M CONFIDENT THAT -- WILL DO WHAT IS NEEDED TO PREVENT ANY REGIONAL RUN OF THE BANK.

>> INVESTOR CONFIDENCE IN BANKS HAS BEEN FALLING --.

EVEN BEFORE THE LATEST CRISIS, INDEX FUNDS WERE DOWN 15% ON THE YEAR.

AFTER SILICON VALLEY BANK COLLAPSED, THEY WENT DOWN 20%.

IF WALL STREET IS DISINFECTING FROM THE SECTOR, WHICH OF THE AVERAGE AMERICAN CONSUME TAKE FROM THIS?

>> I THINK IT IS SHOWING A DEGREE OF CONFIDENCE.

YESTERDAY THEY WERE PUTTING A LOT OF THEIR OWN DEPOSITS, UNINSURED DEPOSITS WITH FIRST REPUBLIC AND SO MY SENSES OBVIOUSLY THERE IS A CHALLENGE WITH INTEREST RATES HAVING RISEN AS RAPIDLY AND A NUMBER OF BANKS BEING AND LONG-TERM BONDS.

BUT THIS IS NOT 2008 AND THE FED AND TREASURY SECTOR HAVE ACTED DECISIVELY AND I EXPECT THINGS TO STABILIZE OR IF THEY DON'T, I KNOW THAT -- WILL TAKE DECISIVE ACTION.

>> THESE CONCERNS HAVE BEEN ONGOING FOR SOME MONTHS.

WE ARE JUST SEEING IT NOW.

THERE IS A QUESTION OF WHETHER OR NOT WHAT HAPPENED AT SILICON VALLEY BANK WILL HAPPEN AT OTHER BANKS WITH FIRST REPUBLIC HAVING THESE PROBLEMS SO PUBLICLY AS WELL WE HAVE TO ASK ARE THESE THE CANARY IN THE COAL MINE?

>> I THINK IT SHOWS A PROBLEM WITH REGULATION.

I WAS HEAVILY LOBBIED TO DEREGULATE IN 2018 AND NOT HAVE THESE BANKS SUBJECT TO THE STRESS TEST LIQUIDITY TEST.

I VOTED AGAINST THAT'S.

I VOTED FOR STRICTER BANK REGULATIONS.

NOW IT SEEMS WE DO NEED THAT.

WE NEED THE LIQUIDITY AND STRESS TESTS.

WE NEED THOSE TESTS TO BE BETTER.

MY UNDERSTANDING IS THEY ARE NOT RUNNING THE TESTS WITH THE SPIKE IN INTEREST RATES AND WE NEED TO BE ASKING HOW THE SAN FRANCISCO FED CAN BE DOING BETTER ALSO IN TERMS OF ENFORCEMENT.

THAT NEEDS TO BE GOING FORWARD I THINK THE PRIMARY ISSUE FOR CONGRESS.

>> YOU MENTIONED 2008 AND IT DOES FEEL REMINISCENT IN SOME WAYS.

AT THAT POINT TO THE GOVERNMENT SAID THE BANKS WERE TOO BIG TO FAIL AND SO IT BAILED THEM OUT.

SILICON VALLEY BANK IS A SMALLER REGIONAL BANK.

WHY DID YOU ADVOCATE FOR GOVERNMENT INTERVENTION HERE?

>> IT WAS CLEAR I WAS AGAINST BAILOUTS.

I DIDN'T THINK ANY OF THE INVESTORS SHOULD BE PROTECTED AND THEY ARE NOT.

I DIDN'T THINK ANY OF THE SHAREHOLDERS TO BE PROTECTED AND THEY ARE NOT.

I THINK WE SHOULD -- BACK MONEY FROM THE EXECUTIVES WHO SOLD STOCK.

I HAVE BEEN ADVOCATING VERY STRONGLY FOR THAT BUT DEPOSITORS JUST PUT THEIR MONEY IN THE BANK.

THEY SHOULD BE PROTECTED.

THEY ARE NOT ASSESSING THE RISK OF A BANK CLOSING AND THE DANGERS WE HADN'T PROTECTED THOSE DEPOSITS OR FUNDS WOULD HAVE BEEN SOME OF THAT MONEY WOULD HAVE GONE ALL TO THE FOUR NEW YORK BANKS AND WE WOULDN'T HAVE REGIONAL BANKS.

UNLIKE 2008, THE ASSETS UNDERLYING SILICON VALLEY BANK ARE GOOD ASSETS.

IT IS NOT LIKE THEY MADE A BUNCH OF BAD LOANS.

MADE A TERRIBLE DECISION TO JUST BE LONG-TERM TREASURY BONDS WITHOUT A -- AND THEY ARE SUFFERING THE CONSEQUENCE BUT THAT IS WHY I DON'T THINK IT WILL COST THE DEPOSIT INSURANCE FUND MONEY BECAUSE ULTIMATELY, THEY WILL BE ABLE TO SETTLE THE ASSETS IN THE DEPOSIT INSURANCE FUND, WHICH IS PAID FOR WITH BANK PREMIUMS.

>> IS THIS NOT THE SAME CONCERN THAT OTHER BIG BANKS MIGHT HAVE USED THE SAME SORT OF TACTICS AND BUYING UP THOSE BONDS AND HAVING THIS PROBLEM WITH THE INTEREST RATES HIKING UP SO QUICKLY AND BEING CAUGHT FLAT FOOTED WITHOUT LIQUIDITY?

>> KNOW BECAUSE THE SILICON VALLEY BANK WAS PARTICULARLY IRRESPONSIBLE.

THEY GOT A LITTLE BIT GREEDY PICK THE HIGH LONG-TERM BONDS GIVE A HIGHER INTEREST RATE AND THEY PUT ALL OF THE MONEY LONG- TERM BONDS AND THEY DIDN'T HAVE ENOUGH SHORT-TERM BONDS AND THEY DIDN'T HEDGE FOR WHAT HAPPENS TO THE INTEREST RATES, IF THEY GO HIGHER.

THEY ALSO HAD A VERY NON- DIVERSIFIED CLIENT BASE.

YOU LOOK AT BANK OF AMERICA PICK HE HAD MILLIONS OF AMERICA WITH UNDER 250,000 DEPOSITS WHICH ARE FULLY INSURED.

SILICON VALLEY BANK WAS ONE OF THE HIGHEST NON-INSURED BANKS WITH A VERY VERY LARGE ACCOUNTS.

10 OR 15 PEOPLE START TO PULL OUT THOSE LARGE ACCOUNTS, YOU COULD HAVE A RUN.

THE CIRCUMSTANCES FOR THE BANK WERE PARTICULARLY BAD.

>> THERE HAS BEEN A LOT OF TALK ABOUT THE HYPOCRISY OF THE TECH INDUSTRY WHICH IS FOUGHT AGAINST GOVERNMENT REGULATION FOUR YEARS.

YOU MENTIONED THE LOBBYING THAT SILICON VALLEY BANK DID TO NOT HAVE TO DO STRESS TESTS.

HYPOCRISY SEEMS TO BE NO GOVERNMENT REGULATION BUT YES PLEASE GIVE US MONEY TO SOLVE THE CRISIS.

SO I AM CURIOUS WHAT YOU THINK, WHAT SILICON VALLEY BANK WHO HAS WON THE RIGHT TO NOT HAVE TO SUBMIT TO SOME FORMS OF FEDERAL BANKING OVERSIGHT, IS THERE HYPOCRISY IN THE SITUATION AND SHOULD IT HAVE BEEN REWARDED LIKE THIS?

>> I THINK THERE ARE MANY PEOPLE IN SILICON VALLEY LIKE MYSELF WHO HAVE ADVOCATED FOR STRONGER REGULATION.

I CALLED FOR AN INTERNET BILL OF RIGHTS.

I VOTED AGAINST THE DEREGULATORY EFFORTS THAT TRUMP HAD TO TAKE AWAY -- FROM BANKS LIKE SILICON VALLEY BANK AS DID THE ENTIRE BAY AREA DELEGATION.

IT WASN'T MY VOTES.

I HAVE CALLED FOR STRONGER ANTITRUST ENFORCEMENT.

THIS WAS NOT ABOUT THE TECH EXECUTIVES OR THE VCS.

THIS WAS ABOUT A NONPROFIT ORGANIZATION LIKE SILICON VALLEY COMMUNITY SERVICES CENTER IN MY DISTRICT THAT HAD OVER $1 MILLION IN THE BANK TO BE ABLE TO MAKE ITS OWN MORTGAGES FOR THEIR FOOD BANK.

THERE HAS BEEN A LOT OF COMPANIES IN MY DISTRICT AND AROUND THE COUNTRY, DEFENSE TECH, BIOTECH, STARTUP COMPANIES AND THEY WOULD HAVE HAD TO LAY OFF MANY PEOPLE OR GO UNDER AND ALL WE WERE DOING AS A FEDERAL GOVERNMENT IS SAYING THEY PUT MONEY IN THE BANK, THAT MONEY SHOULD BE PROTECTED.

IT IS NOT PROTECTING ANY OF THE PEOPLE WILL WHO IT -- SPECULATION.

>> I WANT TO READ A STATEMENT FROM ECONOMIST DEAN BANKER OF THE CENTER FOR ECONOMIC AND POLICY RESEARCH ABOUT THE FEDERAL INTERVENTION PICK HE WROTE THIS IN AN EMAIL TO THE INTERCEPT.

HE WROTE THERE IS DEFINITELY A CLASS ELEMENT.

LOOK AT HOW EASILY WE CAN TOSS TENS OF MILLIONS OF DOLLARS OF PEOPLE WHO COULDN'T FIGURE OUT HOW LIMITS ON FDIC DEPOSIT INSURANCE WORK BUT THE IDEA OF GIVING $10,000 IN DEBT RELIEF TO A STUDENT WHO MIGHT HAVE USED BAD JUDGMENT IN TAKING OUT A LOAN WHEN THEY WERE 18 GETS SO MANY PEOPLE UPSET ABOUT MORAL HAZARD AND INDIVIDUAL RESPONSIBILITY.

I WOULD ARGUE AND I THINK YOU PROBABLY WOULD TO THAT THOSE 18- YEAR-OLDS ARE NOT NECESSARILY EXERCISING BAD JUDGMENT BY TAKING OUT A STUDENT LOAN AND THEY ARE CERTAINLY ENCOURAGED TO DO THAT.

IS A MEMBER OF THE PROGRESSIVE CAUCUS AND IN YOUR OWN WORK, YOU HAVE SUPPORTED STUDENT DEBT RELIEF AND THE CANCELLATION OF STUDENT THAT'S.

TALK TO US A LITTLE BIT ABOUT THE SOCIETY WE ARE LIVING IN WILL RIGHT NOW AND WHY IT IS SO EASY FOR BILLIONS OF DOLLARS TO FLOW TO THE WEALTHY RATHER THAN TO THE POOR.

>> I DO THINK IN THIS CASE THE DEPOSITS WOULD NOT JUST BENEFIT THE WEALTHY.

THE DEPOSITS THAT WERE THERE TO MAKE PAYROLL.

I TALKED TO -- 400,000 AMERICANS WOULDN'T HAVE GOTTEN PAID -- THE DEPOSITS ARE OF A SINGLE MOM, AND OHIO A SINGLE MOM ENTREPRENEUR A STARTUP FOUNDER WHO NEEDED THIS TO MAKE PAYROLL.

I GET DEAN'S LARGER POINT WHICH IS WHEN YOU HAVE THE ADVOCACY OF A LOT OF VENTURE CAPITALISTS, LEADERS OR POWERFUL CONSTITUENT THING WE NEED TO LOOK OUT FOR PAYROLL, WE NEED TO LOOK OUT FOR COMPANIES GOING BANKRUPT, THE GOVERNMENT CAN ACT INTO CAN ACT IN A FEW DAYS.

WE DON'T HAVE THAT SAME URGENCY IN EAST PALATINO OHIO, IN JACKSON MISSISSIPPI.

WE DON'T HAVE THAT SAME URGENCY WHEN IT COMES TO STUDENT DEBT OR THE MEDICAL DEBT THAT MANY PEOPLE IN THIS COUNTRY HAVE.

WE HAVEN'T HAD THAT SAME URGENCY FOR RAISING A WAVE OR TO GET CHILD CARE TO FAMILIES WHO CANNOT AFFORD IT.

I THINK THE ANGER COMES NOT ABOUT AN OPPOSITION TO THE POLICY.

-- WORKING FAMILIES MORE IF WE HAVEN'T GUARANTEE THE DEPOSIT BUT IN FRUSTRATION THAT GOVERNMENT ONLY SEEMS TO WORK WHEN YOU GOT A LOT OF PROMINENT PEOPLE OR WEALTHY PEOPLE SCREAMING FOR IT TO WORK.

>> IS THERE A CHANGE THAT YOU WANT TO SEE IN OUR SYSTEM AS A RESULT OF THIS SITUATIO?

>> I WANT TO SEE THREE CHANGES.

FIRST WE NEED MORE REGULATIONS ON LARGE REGIONAL BANKS.

WE NEED TO STRENGTHEN THE LIQUIDITY AND STRESS TEST TO MAKE SURE THIS SITUATION DOESN'T WORK AND THREE WE NEED TO HAVE FEDERAL DEPOSIT INSURANCE COVER PAYROLL -- BANKS BE CHARGED HIGHER PREMIUMS TO COVER IT AND HAVE A TAX ON LARGE ACCOUNT HOLDERS FOR PEOPLE WHO HAVE MORE THAN TWO AND $50,000 CAN PAY A TAX FOR BUYING INSURANCE.

>> REPRESENTATIVE, WE DISCUSSED THE CALIFORNIA SENATE RACE IN THE PAST HERE ON THE SHELF A FEW WEEKS AGO, WE HAD CONGRESS MEMBER BARBARA LEE ON.

SHE WAS THE LATEST PERSON TO ENTER THE RACE AND SHE IS JOINING REPRESENTATIVES ADAM SCHIFF AND KATIE PORTER.

WHERE DO YOU STAND AT THIS POINT?

WILL YOU MAKE YOUR OWN RUN AT THE SEAT?

>> I AM A BIG ADMIRER OF BARBARA LEE, ONE OF THE CONSISTENT ANTIWAR VOICES IN THE CONGRESS.

I SAID IT IS IMPORTANT THAT WE HAVE AN AFRICAN-AMERICAN WOMAN.

I HAVE ALSO SAID THAT I WILL BE MAKING AN OFFICIAL DECISION BY THE END OF THE MONTH BUT THAT BARBARA -- WOULD BE SOMETHING I TAKE INTO CONSIDERATION.

I WILL BE TALKING TO MY -- NEXT WEEK AND WE WILL HAVE A FINAL DECISION BY THE END OF THE MONTH.

>> DO YOU MEAN WE SHOULD HAVE HAD YOU ON AND A COUPLE OF WEEKS INSTEAD OF TODAY?

>> I ALWAYS ENJOY COMING ON.

I AM HAPPY TO COME BACK ANYTIME.

>> ALL RIGHTS.

THANK YOU.

I KNOW YOU HAVE A LOT OF WORK TO DO.

>> APPRECIATE IT.

>> TAKE CARE.

IN ADDITION TO THE BANKING TURMOIL AND STOCK MARKET UPS AND DOWNS, WE ARE ALSO SEEING ANOTHER ROUND OF TECH LAYOFFS.

META-ANNOUNCED 10,000 MORE PEOPLE WOULD LOSE THEIR JOBS AS THE SOCIAL MEDIA HE MET CONTINUES TO TIGHTEN ITS BELT.

JOINING ME NOW TO DISCUSS MORE FINANCIAL NEWS, OUR MARKET WATCH SAN FRANCISCO BUREAU CHIEF JEREMY AND MARKETWATCH SENIOR REPORTER LEVY, THANK YOU BOTH FOR BEING HERE.

>> THANK YOU FOR HAVING US.

>> JEREMY, COULD YOU TELL US MORE ABOUT THE BROADER ECONOMIC PICTURE WE ARE SEEING RIGHT NOW AND HOW THE COLLAPSE OF SILICON VALLEY BANK, THIS CASH INFUSION INTO FIRST REPUBLIC BANK FITS INTO THE OVERALL PICTURE?

>> IT IS THE SYMPTOM OF TWO DIFFERENT DISEASES THAT CRASHED SILICON BAKE AND THAT IS IN BANKING AND FINANCE IS ONE OF THEM.

A LOT OF THESE BANKS MADE LONG- TERM BETS BACK IN 2021, EARLY 2022 WHEN THE COMPANY WAS BASICALLY A FANTASY LAND.

NOW WE RETURN TO REALITY IN THE ECONOMY IN A VERY HARSH WAY AND THE RISING INTEREST RATES HAVE MADE A LOT OF THOSE BETS LOOK REALLY BAD AND HAS CREATED A PROBLEM FOR THEM AND IN TERMS OF THEIR PAYING OUT THE GOING INTEREST RATES WHILE BRINGING IN THE INTEREST RATES OF TWO YEARS AGO WHICH WERE MUCH SMALLER.

ON THE OTHER END, WE HAD THE TECH SECTOR WHICH HAS MORE PANIC AND FEAR THAT WE HAVE PROBABLY SEEN IN SILICON VALLEY SINCE THE.COM CRASH.

WE ARE SEEING ALL OF THESE LAYOFFS.

WE HAVE SEEN BASICALLY THE END OF A TECH BOOM THAT HAS LASTED FOR 15 YEARS SINCE THE CREATION OF THE iPHONE AND THE CREATION OF CLOUD COMPUTING BACK IN THE MID-ODDS.

WE HAVE HAD JUST UNENDING STRONG GROWTH IN SILICON VALLEY TECH AND NOW THAT SEEMS TO COME TO AN END AND NOBODY REALLY KNOWS WHAT COMES NEXT AFTER THAT BOOM.

IS IT A HUGE BUST?

NOBODY REALLY KNOWS WHAT IS GOING TO COME NEXT AND THAT IS CREATING UNCERTAINTY ALWAYS CREATING FEAR AND SOME SORT OF PANIC.

THERE IS NO MORE APPROPRIATE WAY TO SHOW FEAR AND PANIC ANY BANK RUN WHICH IS WHAT HAPPENED IN THE CASE OF SILICON VALLEY BANK.

THESE WERE TECH COMPANIES AND VENTURE CAPITALISTS CAUSING A BANK RUN OUT OF PURE FEAR AND PANIC AND THAT IS BECAUSE OF THOSE TWO THINGS REALLY COMING TOGETHER.

>> TELL US ABOUT WHO HAS BEEN IMPACTED HERE.

YOU HAVE BEEN DOING SOME REPORTING INTO THE COMMUNITY SERVED BY SILICON VALLEY BANK.

WE THINK OF IT AS THE TECH COMMUNITY PRIMARILY, BUT THAT IS NOT THE ONLY CUSTOMER THERE.

>> RIGHTS.

SO MANY PEOPLE WERE AFFECTED BY WHAT HAPPENED.

MOST OF ALL, FIRST OF ALL THE EMPLOYEES OF SILICON VALLEY BANK.

THIS HAPPENED OVER A MATTER OF A COUPLE OF DAYS.

THEN THE TECH COMMUNITY, TECH STARTUPS AND VENTURE CAPITALISTS WHO TOLD MY COLLEAGUES AND ME THAT SILICON VALLEY BANK WAS VERY UNIQUE, SERVED THEIR NEEDS AND THAT SILICON VALLEY BANK REALLY MADE THE STARTUP WORLD GO ROUND.

SO THAT IS A HUGE THING.

ALSO WE HAVE TO REMEMBER TECH STARTUPS ALSO NEED OTHER TECH COMPANY SERVICES LIKE THE CLOUD AND OTHER SOFTWARE.

SO SOME ANALYSTS ARE SAYING THAT THE EFFECTS OF THIS COULD BE FELT BY BIG TECH COMPANIES úAS WELL AND COULD BE FELT FOR YEARS TO COME.

THEN FINALLY, SILICON VALLEY BANK SERVED NOT JUST THE TECH COMMUNITY, IT SERVED OUR GOVERNOR, GOVERNOR NEWSOM.

THE WINE INDUSTRY, NONPROFITS, AFFORDABLE HOUSING PROJECTS SO THE IMPACT WAS FELT REALLY WIDELY.

>> WHEN YOU SAY IMPACTED FOR YEARS TO COME, THE GOVERNMENT STEPPED IN AND THOSE CUSTOMERS ALL NOW HAVE ACCESS TO THEIR MONEY.

SO IS THERE A LONG-TERM RIPPLE EFFECT HERE?

>> YESTERDAY MORGAN STANLEY PUT OUT A REPORT THAT SAID THAT THEY THINK A LOT OF STARTUPS ARE GOING TO GO UNDER BY THE END OF THE YEAR BECAUSE OF THIS.

>> WOW.

>> WE DO KNOW KIND OF WHAT IS COMING NEXT BUT WE DON'T KNOW IF IT WILL PLAY THE SAME ROLE IN THE SAME WAY.

IT IS PROBABLY GOING TO CHANGE HOW IT ADDS AND SO WE DON'T REALLY KNOW IF THAT ROLE IS GOING TO BE FILLED IN THE SAME WAY AND WHAT IS GOING TO HAPPEN AFTER THAT.

AGAIN, ANOTHER LEVEL OF UNCERTAINTY THAT IS JUST GOING TO CREATE MORE FEAR WITHIN THE TECH SECTOR.

>> THERE WILL BE A SINGLE SILICON VALLEY BANK LIKE THING THAT WILL RISE BECAUSE SOME OF THE VCS I TALKED TO THIS WEEK SAID NOW WE KNOW THE IMPORTANCE OF DIVERSIFICATION AND NOT KEEPING ALL OF OUR EGGS IN ONE BASKET.

>> WHAT DOES THIS ECONOMIC ENVIRONMENT DUE TO STARTUP FUNDING PARTICULARLY FOR WOMEN AND PEOPLE OF COLOR?

LET'S POINTS TO THIS THIS REPORTING WE HEARD ABOUT EARLIER THIS YEAR, HORRENDOUS JUST IN THE NUMBERS.

ONLY 2.4% OF ALL VENTURE FUNDING WENT TO WOMEN LED TEENS AND 2021.

THAT NUMBER ACTUALLY DROPPED IN 2022 TO 1.9%.

THERE IS THIS TINY AMOUNT OF MONEY THAT IS GOING TO WOMEN LED TEAMS.

WHAT HAPPENS NOW IN THE STARTUP ENVIRONMENT FOR WOMEN AND OTHERS WHO ARE JUST BEGINNING NEW VENTURES?

>> RIGHTS.

MORE NUMBERS FOR YOU, BECAUSE OF ALL THE ECONOMIC UNCERTAINTY THAT WE HAD EVEN BEFORE THE COLLAPSE, VENTURE CAPITAL FUNDING OVERALL WAS DOWN 36% LAST YEAR, AND VENTURE CAPITAL FUNDING TO BLACK LET STARTUPS WAS DOWN 42%.

SO HISTORICALLY, WOMEN AND PEOPLE OF COLOR HAVE HAD A HARDER TIME GETTING FUNDING AND ALL OF THIS COULD COMPOUND THAT.

ONE OTHER THING I LEARNED DURING MY REPORTING THIS WEEK WAS THAT SOME TECH STARTUP FOUNDERS AREN'T COMFORTABLE BANKING WITH MAJOR FINANCIAL INSTITUTIONS BECAUSE THOSE BANKS HAVE A TERRIBLE TRACK RECORD OF DISCRIMINATING AGAINST BLACK AND BROWN PEOPLE AND THEY HAVE HAD TO PAY MILLIONS AND MILLIONS OF DOLLARS IN SETTLEMENTS.

IT SHOWS.

SO I THINK IT IS GOING TO BE TWOFOLD.

ONE, WILL FOUNDERS OF STARTUPS BE COMFORTABLE BANKING AT PLACES THAT ARE NOW GOING TO TRY TO TAKE THE PLACE OF SILICON VALLEY BANK AND WILL THOSE BANKS BE COMFORTABLE LENDING TO THOSE PEOPLE?

>> WILL VENTURE CAPITALISTS BE LOOKING FOR WOMEN AND PEOPLE OF COLOR TO FUND ANYMORE?

IN THESE TIMES OF FEAR, THEY TEND TO STICK WITH WHAT THEY KNOW AND IF YOU HAVE NOTICED THE VENTURE CAPITAL INDUSTRY IS VERY MALE AND VERY WHITE.

THEY ARE GOING TO BE ENTREPRENEURS GETTING LAID OFF OR LEAVING THESE COMPANIES.

JUST LOOK AT TWITTER JUST CUT ANOTHER ROUND OF EMPLOYEES, MOST OF THEM FOUNDERS THAT THEY HAD ACQUIRED.

THOSE LARGELY WHITE DUDES ARE GOING TO BE GOING OUT AND TRYING TO START A NEW COMPANY AND THEY HAVE ALREADY PROVEN THEY CAN START A COMPANY AND THESE VENTURE CAPITALISTS ARE GOING TO LOOK AT THAT AND SAY I WOULD RATHER DO THAT THAN TAKE A CHANCE ON SOMEBODY ELSE.

>> THIS BANK RUN SEEMS TO BE UNSIGHTED BY VENTURE CAPITALISTS SUCH AS THE FOUNDER OF PAYPAL AND FOUNDERS FUND.

HE IS A SELF-DESCRIBED CONSERVATIVE LIBERTARIAN, HAS NOT WANTED GOVERNMENT INTERVENTION IN THE PAST AND HE WENT OUT THERE TO SOME OF THE FOUNDERS AND HIS COMPANIES THAT HE INVESTED IN AND SAID PULL YOUR MONEY.

>> HE SENT A MAMA -- LETTER THURSDAY MORNING AND THE SILICON VALLEY WHISPERER NETWORK STARTED AND EVERYBOY HEARD ABOUT IT.

THAT IS PART OF BEING OUT HERE.

YOU START HEARING THESE THINGS AND THEY ALL ACTED ON ITS.

THAT IS ONE OF THE FIRST MATCHES TO THE FIRE OF THAT TANK RUN.

A LOT OF PEOPLE POINTED OUT THE HYPOCRISY OF A LOT OF LIBERTARIAN VCS ASKING FOR A BAILOUT.

WHAT I REALLY LOOK AT IS SILICON VALLEY WOULD NOT HAVE GONE UNDER WITHOUT THE BANK RUN.

IT HAD AN EQUITY INVESTMENT LOCKDOWN THAT WOULD HAVE OVERCOME WHAT WAS FACING AND THEN THE BANK RUN IS WHAT TORE IT APART.

WITH THE SHOE ON THE OTHER FOOT, THE INVESTORS IN SILICON VALLEY BANK WOULD NOT RUN FROM THESE STARTUP THAT HAD A BED BED AND HAD TO SELL SOME EQUITY TO COVER UP THAT BAD BET.

IT HAPPENS ALL THE TIME.

THE EXAMPLE I USE IS HUBER DROPPING BILLIONS INTO AUTONOMOUS VEHICLES REALIZING THEY WERE STILL BEHIND AND NEVER WOULD USE THAT AND SOLD AT A HUGE LOSS THAT THAT UNIT THEY HAD DEVELOPED, NOBODY RAN AWAY, THE STOCK, I THINK IT WENT UP AFTER THEY SOLD IT BECAUSE PEOPLE REALIZED THEY WOULD BE LOSING MONEY ANYMORE.

THERE ARE A LOT OF PEOPLE TO KIND OF CRITICIZE IN THIS MOMENT.

I REALLY DO THINK THE VENTURE CAPITAL COMMUNITY MIGHT BE NUMBER ONE ON THAT LIST.

>> LET'S TURN TO SOME OTHER NEWS PROPOSITION 22 HAD A BIG WEEK IN THE COURTS.

THIS WAS THE PROPOSITION THAT VOTERS DETERMINED COMPANIES LIKE HUBER, LET'S COMMODORE DASH COULD CLASSIFY THE WORKERS AS INDEPENDENT CONTRACTORS.

THERE WAS AN APPEAL IN THE COURTS THIS WEEK SAID YES YOU GET TO KEEP CLASSIFYING YOUR WORKERS IN THAT WAY.

ASSUMING THIS WILL HEAD TO THE CALIFORNIA SUPREME COURT AT THIS POINT.

>> I CANNOT IMAGINE THAT IT WOULDN'T BE APPEALED ALL THE WAY TO THE SUPREME COURT'S.

THAT IS THE NEXT STEP.

THE GIG COMPANIES MAJOR VICTORY FOR THEM THIS WEEK.

AND APPEALS COURT HELD MOST OF PROP 22 AND WHAT THAT MEANS IS THAT OF COURSE THEY CAN KEEP CLASSIFYING THEIR WORKERS AS INDEPENDENT CONTRACTORS INSTEAD OF EMPLOYEES AND WHAT THAT COULD MEAN FOR CALIFORNIA IF THE CALIFORNIA SUPREME COURT UPHOLDS THIS RULING IS THAT OTHER COMPANIES COULD TRY TO DIGNIFY THEIR WORKERS.

THEY COULD TRY TO ADOPT THE HUBER MODEL TO TRY TO SAVE MONEY AND TRY TO TURN THEIR EMPLOYEES INTO INDEPENDENT CONTRACTORS.

THE OTHER THING IS THAT THE COMPANIES HAVE SAID THAT THEY WANT TO SPREAD THE PROPOSITION 22 MODEL ELSEWHERE.

SO IF THEY WOULD IN CALIFORNIA, IT IS A BIG DEAL AND THEY COULD TRY TO EXPAND THAT MODEL EVERYWHERE.

>> THE CALIFORNIA SUPREME COURT WILL BE INTERESTING BECAUSE WHAT STARTED THIS WAS A B5 WHICH WAS BASED ON A CALIFORNIA SUPREME COURT RULING.

BASICALLY ALL OF THIS IS STARTED BY THE SUPREME COURT'S.

>> WHICH WAS?

D THEN WE HAD -- >> THE NEW LABOR LAW THAT REQUIRED ALL OF THESE COMPANIES TO TREAT THEIR DRIVERS AS EMPLOYEES AND THEN HUBER AND LYFT WERE ABLE TO PASS THIS PROPOSITION THAT SAID NO BUT YOU CAN CONTINUE TO SEND THEM AS I SEES .

NOT REALLY OVERTURNING A B5, IT IS AN EXCEPTION.

>> EXEMPTING THEM.

SO THE SUPREME COURT IS THE ONE THAT BASICALLY STARTED THAT PROCESS AND NOW IF THEY GET THIS CASE, IT IS GOING TO BE FASCINATING TO SEE WHAT THEY THINK ABOUT IT AND IF THAT LIVES UP TO THEIR PREVIOUS RULINGS.

>> WE WILL BE WATCHING IT FOR NATIONAL REPERCUSSIONS AS WELL.

REPORTING HAS ALSO HAD A VERY PERSONAL EFFECT AND YOU HELPED A DEACTIVATED WORKER.

>> WHEN YOU ARE A GEEK WORKER YOU CAN BE DEACTIVATED OR BASICALLY KICKED OFF THE APP AT ANY TIME AND THAT IS WHAT HAPPENS TO A MASSACHUSETTS HUBER DRIVER THAT I WAS SPEAKING WITH FOR ANOTHER STORY.

WHEN HE TOLD ME HIS STORY, I WAS FASCINATED BECAUSE HUBER BASICALLY ASKED HIM TO PROVE THAT HE WAS AT THE AIRPORT WAITING TO PICK UP A PASSENGER.

SO HE WAS ASKED TO SEND A PHOTO.

HE SENT A SELF THE END FOR SOME REASON THE PHOTO SHOWED META DATA THAT INDICATED HE WAS ON AN ISLAND SOMEWHERE ELSE SO HUBER DEACTIVATED HIM.

SO HE WENT TO HUBER AND SAID THERE WAS NO WAY I COULD HAVE BEEN ON THAT ISLAND BECAUSE CARS CANNOT GO ON THAT ISLAND.

BUT HUBER STILL DEACTIVATED HIM.

THE OTHER REALLY FASCINATING PART OF THE STORY IS LAST YEAR HE SPENT $180,000 TO TRY TO START AN HUBER BLACK BUSINESS.

HUBER BLACK IS HUBER'S PREMIUM SERVICE.

THINK BLACK CARS, LUXURY VEHICLES.

SO HE HAD BOUGHT TWO VEHICLES FOR THAT PURPOSE.

HE HAD GOTTEN A COMMERCIAL LICENSE AND HE WAS BASICALLY TRYING TO START HIS MANY PLATES BUT HUBER KICKED HIM OFF THE APP AND SO I WENT TO HUBER.

THIS HAPPENED IN DECEMBER BY THE WAY.

I WENT TO HUBER AND I JUST SPOKE TO THE SKY IN MARCH.

HE HAD BEEN DEACTIVATED FOR A FEW MONTHS.

WITHIN TWO DAYS, HUBER HAD CHANGED ITS MIND AND REACTIVATED HIM AND I JUST WANT TO SAY THAT I HAVE ALSO REPORTED ON OTHER D ACTIVATIONS AND I THINK THIS IS A SYSTEMIC THING MAY COUPLE OF OTHER DOESN'T GIG WORKERS HAVE ALREADY REACHED OUT TO ME AFTER READING THAT STORY AND ASKED ME TO TAKE A LOOK AT THEIR STORIES.

SO I AM STARTING TO SORT THROUGH THOSE.

>> AND REALIZE PROP 22 WILL DO NOTHING ABOUT THAT.

THERE ARE NO LAWS REALLY GET ABOUT THE ACTIVATIONS.

ILLINOIS IS LOOKING INTO THE LAW SETTING SOME KIND OF BASELINE FOR HOW DOES THE ACTIVATIONS HAPPEN BUT RIGHT NOW, HUBER AND LYFT HAVE COMPLETE CONTROL OVER THAT.

>> JEREMY OWENS AND LEVY THANK YOU SO MUCH FOR BEING WITH US TODAY.

APPRECIATE IT.

>> ABSOLUTELY.

>> THE SAN FRANCISCO SPCA HAS BEEN AT THE FOREFRONT OF ANIMAL WELFARE ADVOCACY FOR MORE THAN A CENTURY.

THE ORGANIZATION IS THE LARGEST SHELTER IN THE BAY AREA AND IT WAS THE FIRST CAGE FREE ANIMAL SHELTER TO BE ESTABLISHED IN THE UNITED STATES.

JOIN US AS WE VISIT THE -- FOR THIS WEEK'S LOOK AT SOMETHING BEAUTIFUL.

>> [ MUSIC PLAYING ] >>> THAT IS THE HAPPY HAPPY END OF OUR SHOW.

WE WANTED TO LET YOU KNOW THAT WE HAD PLANS TO SPEAK WITH MAYOR -- TONIGHT BUT SHE HAD TO RESCHEDUE AND WILL JOIN US NEXT WEEK.

WILL ALSO BE JOINTS NEXT FRIDAY BY THE CEO OF ONE FAIR WAGE.

IF YOU WOULD LIKE TO SHARE YOUR COMMENTS OR QUESTIONS FOR OUR GUESTS, YOU CAN EMAIL US AT -- AND FIND KQED NEWSROOM ONLINE OR ON TWITTER AND YOU CAN REACHED ME AT LENGTH IN AT PRIYA D CLEMENS.

THANK YOU FOR JOINING US AND HAVE A GREAT WEEKEND.

>> WATCH THE SEASON THREE PREMIERE SUNDAY NIGHT AT NINE.

>> WHEN COVID-19 ATTACKED AMERICA, DR. TONY FAUCI LET IN THE RESEARCH FOR TREATMENTS AND VACCINES.